Can you ever change (or erase) your credit report history?
Credit is a very important thing to have in this economy. Once credit history is destroyed, it may be very hard to improve. A bad credit history can lead to a low credit score that may prevent lenders from extending credit to consumers. Many people make mistakes with their credit and go on to maintain good payment histories in the future. Many may wonder if it is possible to ever change or erase that negative credit history in the future. A bad credit history is not the end of the world. In time, lenders will allow consumers to borrow money once they reestablish themselves as good borrowers.
A Credit History Report
A credit history report contains all of the information regarding payment history and balances on accounts. When lenders are 30 to 60 days behind on their loan accounts, lenders report this information to credit agencies. This information can remain on credit reports for 7 years or longer, depending on the lender and the debt. Many consumers are frustrated with this fact, but it is the law. Luckily, information does not remain on a credit history report forever.
Information cannot be changed but it can fall off after several years. Lenders generally report to the credit agencies that the account was “paid in full” so that they can denote this information on a credit history report. Lenders may still lend to consumers because the late payments do not hurt credit as much over time as they begin to rebuild their credit. Lenders may also consider consumers’ payment history for the past few years to determine if they will lend to them. Some lenders will request that information be removed from a credit history report as soon as it is paid, but they are not required to do so by law.
Ways to Prevent Negative Information on a Credit History Report
- Do not get more credit that necessary. Many people get multiple credit cards and credit accounts at once without a clear idea about how to pay them off in a timely fashion. Credit should only be used when there is no other source to pay for things. Late payments can remain on credit reports for up to 7 years so borrow responsibly.
- Only have once credit account at once. Some people get auto loans, credit cards, mortgages, and personal loans all at one time. Consumers may tie up a large amount of their monthly income with bills from these accounts, and they may not have any wiggle room in their budget for unexpected events. Pay off one credit account before opening another account to prevent negative information on a credit history report.
- Negotiate payments with credit lenders. Consumers should contact lenders as soon as they realize that they may not be able to pay their debts. Lenders may be willing to negotiate a payment plan without reporting the information to credit agencies. When consumers show that they are interesting in protecting their credit history, lenders are more likely to help them.
Consumers should do everything in their power to prevent negative information from being reported to credit agencies. Having a good line of communication with lenders is the only way to preserve credit history. Additionally, if something is incorrect on a credit history report, consumers can dispute the information and possibly have it removed.